Thursday, December 21 2017 12:56
Alexandr Avanesov

The Armenian parliament introduced amendments to the Tax Code

ArmInfo. The National Assembly of Armenia adopted amendments to the Tax Code proposed by the Government of Armenia at the meeting on December 21 in the second and final reading.

According to RA Deputy Minister of Finance David Ananyan, 36 proposals were submitted to the second reading, of which 12 were submitted by the government, and 24 from parliamentary deputies from the factions of the Republican Party and "Elk". After the negotiations on a significant part of these proposals, a compromise was reached. The initiative will revise 242 regulations and about 113 articles. Changes and additions are divided into three main groups: editorial changes - 180, terminological - 29, and substantial - 30. In general, the package is aimed at improving tax administration, and the business environment. They, according to David Ananyan, will form a good situation after January 1, 2018.

According to the package, taxation of dividends will be made only after the shareholders meeting of the company decides to redistribute profits. "The current legal norm is contrary to the principles of corporate governance," the deputy minister said. According to him, today's legal regulation says that if until June 30, following the reporting period at the general meeting of shareholders of the company, a decision is not made to redistribute profits, the state nevertheless considers them redistributed and withdraws its share in the form of tax. As clarified by the representative of the Ministry of Finance, initially was set a goal - to offer a certain tool in terms of tax administration. However, at present, it is decided to abandon this tool, which does not comply with generally accepted principles of corporate governance. The proposed amendments to the taxation of dividends also specify the rights and obligations of individuals - citizens of foreign states and citizens of RA, who receive dividends as shareholders.

The Tax Code, adopted in the autumn of 2016, provides for taxing the dividends of individuals - non- residents since January 1, 2017, and residents since January 1, 2018 in the amount of 10% and 5% respectively. Today, the Ministry of Finance is proposing to specify the rule of law, because at this stage there is no clear definition of which period this regulation should cover - from 2000 to 2018, or after the enactment of the legislative norm. "We propose to impose taxes on those dividends that foreign citizens and citizens of the RA have received, accumulated and distributed - from January 1, 2017, and from January 1, 2018, respectively," Ananyan said.

Another rule concerns overpayments accumulated in the line of the minimum profit tax, which in the future can be used to pay off tax liabilities formed under the profit tax. As the deputy minister reminded, from 2004 to 2014, In Armenia, there was a legislative requirement to pay a minimum income tax. Since January 2014, having refused such a rule, the state has enabled taxpayers to send overpayments accumulated under the minimum income tax to pay off tax liabilities formed under the profit tax without any time limits. The Tax Code, however, introduced a new legal rule, providing for temporary restrictions - until January 1, 2017. As part of the legislative initiative, the government renounces the above norm, thereby returning to the previous setting.  The Armenian government also intends to partially abolish tax benefits when buying a mortgage home. The deputy minister recalled that the legal norm, effective since November 2014, had the goal of forming a stable and solvent demand in the sphere, as well as solving social problems. Every year, an amount of 2.8 billion drams is allocated from the budget to support the program participants. For today, any citizen of Armenia who prepares a mortgage deal returns the income tax paid by him in the form of repayment of interest on his mortgage loan. There are no restrictions on the number of such loans or the social status of the buyer at the moment. As a result, according to Ananyan, the social component turned out to be insignificant. In 2016, the state returned 1.9 billion drams to citizens. "1.6% of the beneficiaries received only 7% of these funds In 2017, 2.2% of the beneficiaries received 12% of all funds provided by the budget," Ananyan explained, adding that there is a person who within three years has received up to 6.6 million drams. Government monitoring revealed that more often the legal norm is used by those who do not have a goal to solve social problems, but only enriched themselves, acquiring the next real estate. In this regard, at this stage, the Ministry of Finance is changing the principle of work. "If there is a desire to stimulate the economy, by injecting money from the state budget, then the real estate market is not the direction of the economy of the republic, which requires investments from the state in priority order," he said. Thus, according to David Ananian, the government should focus resources on maintaining an exclusively social component of the program - the legal norm should support those who are actually solving their social issues. With a view to leveling such risks, the government decided to take a number of restrictions. In particular, from January 1, 2018, interest will not be compensated for a transaction exceeding 55 million drams (about 114 thousand dollars). The sum, according to the authors of the document, is equivalent to the cost of an apartment in 135-140 sq.m in the center of Yerevan. The second restriction will concern the size of the income tax, which the state returns to the "mortgage" - within one transaction not more than 1.5 million drams per quarter, regardless of the number of borrowers or co- borrowers. For a young family, if the couple acts as a borrower and co-borrower, this means that the monthly maximum amount of income tax in the form of a return from the state treasury for which they can claim is 500 thousand drams (in proportion to their monthly joint income of 1.6 or 1.7 million drams). And, thirdly, from January 1, 2018, a preferential program can be used once, be it a borrower or a co-borrower.

The deputy minister also informed that the package provides for the release of VAT from the area of inbound tourism in the next 3 years. He reminded that according to the current law "On VAT", a zero VAT rate applies to tour operators providing tourist services on the territory of Armenia. Meanwhile, when developing the Tax Code, which was adopted in September 2016, the government decided to abolish the benefits, as it aimed to reduce tax preferences and expand the tax base. Nevertheless, after discussions in the government, as well as meetings with representatives of the tourism sector and public organizations, it was decided to restore the tax privilege on the basis of inbound tourism with a reservation to return to this topic after 3 years. "The tour operator, thus, is given the opportunity to conduct business for another 3 years in preferential treatment, and the government will monitor the results in order to understand whether to retain the privilege or refuse it," - David Ananyan concluded.  As for the law on environmental payments, the deputy minister noted that the changes are aimed solely at activating the activities of the Ijevan Bentonite Plant. Today the enterprise, which is the only one in the republic in this area, exporting its products to the Russian Federation, operates less than 25% of its capacity. In order to stimulate the activity of the plant, the government proposed to reduce environmental payments for the development of bentonite deposits from 6% to 4%, and fixed environmental payments - from 2500 drams to 1,650 drams. At the same time, the budget will be short of 36-40 million drams, but from the point of view of the company's development, the revenues of the state treasury for other types of taxes from this enterprise are expected to be much more weighty.  The government also suggests changing the excise tax rates for a number of products. Thus, it is planned to revise the rates of excise tax on vodka made from fruit crops and berries, reducing the indirect tax from 880 drams to 550 drams per liter. Currently, a liter of vodka produced from fruit crops and berries in the Armenian market fluctuates between 3.5 and 4 thousand drams, sometimes reaching 7,000 drams. The proposed changes, according to the deputy minister, will make it possible to activate this sphere. Ananyan also recalled that from January 1, 2018 diesel fuel will be subject to VAT. In this regard, the amount of excise tax payments from 35,000 drams for the 1 tonne of diesel fuel sold will be reduced to 12,000 drams, despite the availability or absence of this type of fuel in December 2017. The deputy minister also announced the government's intention to refuse taxation on the VAT line of reusable packaging. At the same time, goods subject to excise duty from January 1, 2018, but imported or produced earlier, can be sold on the domestic market to the republic without excise stamps until March 31, 2018. It is also envisaged to revise the taxation of the public catering sector. According to the current regulation, as the deputy minister noted, catering facilities with a visitor service area of not more than 600 sq.m. taxed on preferential terms.  The rest were taxed in the general order.

The tax code from September 2016 reduced the preferential bar to 100 sq.m. The government made a decision for a while - until July 1, 2018 to restore taxation on preferential grounds for public catering facilities with an area of up to 600 sq.m. After July 1, the sphere will completely pass to the tax field of the turnover tax. The proposed rate of turnover tax for the sphere will be equal to 10% of the turnover, while at the same time providing the opportunity for the business owner to withdraw from the obligation 6% of the documented expenses, but not less than 4% of the turnover. After July 1, 2018, business entities will have the opportunity to move to a transitional stage, during which the turnover tax will be reduced from 10% to 8%, and 6% - to 5%. Nevertheless, from January 1, 2019, the established rates will be in effect - 10% and 6%. Despite the fact that the innovation, according to the deputy minister, creates more onerous conditions for the taxpayer, they should not lead to higher prices in the public catering system. The draft also provides for the establishment of a provision authorizing the implementation of accounting transactions in paper form, if one transaction in a monthly section does not exceed 3 million drams. 

POST A COMMENT
Input digits     


News
Tigran Avinyan and Mark Pritchard discussed prospects for deepening  cooperation between Armenia and the UKTigran Avinyan and Mark Pritchard discussed prospects for deepening  cooperation between Armenia and the UK
PSRC introduced new regulations for natural gas consumersPSRC introduced new regulations for natural gas consumers
Study: Even with small volumes of the market, Armenia is able to  triple the volume of investmentsStudy: Even with small volumes of the market, Armenia is able to  triple the volume of investments
"Rosgosstrakh Armenia" continues to lead among insurance companies in  list of major taxpayers in Armenia
Government approved distribution among communities of subventions in  amount of 1.9 billion dramsGovernment approved distribution among communities of subventions in  amount of 1.9 billion drams
Minister: Positive expectations formed in Armenia`s business  communityMinister: Positive expectations formed in Armenia`s business  community
EAEU countries began to jointly produce elevatorsEAEU countries began to jointly produce elevators
Subregional Innovation Policy Outlook launched in ArmeniaSubregional Innovation Policy Outlook launched in Armenia
Expert: State Budget revenues over-fulfillment has nothing to do with  real GDP growth Expert: State Budget revenues over-fulfillment has nothing to do with  real GDP growth 
Pension fund Amundi-ACBA-Asset-Management celebrates 5 years of  activityPension fund Amundi-ACBA-Asset-Management celebrates 5 years of  activity
Vache Terteryan: Armenia is interested in localizing alternative  energy sourcesVache Terteryan: Armenia is interested in localizing alternative  energy sources
Possible disputes over the construction project of a new thermal unit  in Yerevan will be resolved in the International Chamber of CommercePossible disputes over the construction project of a new thermal unit  in Yerevan will be resolved in the International Chamber of Commerce
Chinese company interested in setting up basalt fiber manufacturing  enterprise in ArmeniaChinese company interested in setting up basalt fiber manufacturing  enterprise in Armenia
In 2019-2023 In 2019-2023 "ML MINING" LLC invests in development of production of  4 billion drams
Karen Yeghiazaryan has been appointed as Chairman of Management Board  of EvocabankKaren Yeghiazaryan has been appointed as Chairman of Management Board  of Evocabank
Babken Tunyan: The PABSEC platform is needed for communication; one  should not underestimate or overestimate it.Babken Tunyan: The PABSEC platform is needed for communication; one  should not underestimate or overestimate it.
"Haypost" and "Energoimpex" companies will remain in ownership of  Armenian state
At initiative of EC, a working meeting was held at Ministry of  Economy of RA regarding use of EU Taiex and Twining tools by public  sectorAt initiative of EC, a working meeting was held at Ministry of  Economy of RA regarding use of EU Taiex and Twining tools by public  sector
19th International Specialized Exhibition 19th International Specialized Exhibition "FOOD & DRINKS EXPO 2019"  will be held in Yerevan
Armenia approved a protocol on cooperation of EAEU countries with  Vietnam on  exchange of customs informationArmenia approved a protocol on cooperation of EAEU countries with  Vietnam on  exchange of customs information
7.4 billion drams out of an additional 62 billion dram in tax  revenues will be additionally allocated to the implementation of  programs in the field of road construction in Armenia7.4 billion drams out of an additional 62 billion dram in tax  revenues will be additionally allocated to the implementation of  programs in the field of road construction in Armenia
Park Group Company intends to implement in Yerevan a large investment  program worth 7.5 billion dramsPark Group Company intends to implement in Yerevan a large investment  program worth 7.5 billion drams
Armenian government to allocate 40 million drams to repair  Yerevan-Garni-Geghard roadArmenian government to allocate 40 million drams to repair  Yerevan-Garni-Geghard road
Jermuk Group Company invests AMD 363 million in production expansionJermuk Group Company invests AMD 363 million in production expansion
Minister assures: household appliances production plant in Armenia is  not a mythMinister assures: household appliances production plant in Armenia is  not a myth
Chinese business intends to invest $ 5 million in the production and  bottling of mineral waterChinese business intends to invest $ 5 million in the production and  bottling of mineral water
Four telecom operators in Armenia reduced tax payments to the state  treasury in I quarter of 2019 by 45.6% per annumFour telecom operators in Armenia reduced tax payments to the state  treasury in I quarter of 2019 by 45.6% per annum
EAEU is developing cooperation with the Pacific AllianceEAEU is developing cooperation with the Pacific Alliance
Gazprom Armenia continues to top the list of the largest taxpayersGazprom Armenia continues to top the list of the largest taxpayers
Armenian MFA: Polish companies are interested in the Armenian marketArmenian MFA: Polish companies are interested in the Armenian market


Exchange rates
24.05.2019
RUB7.440.02
USD480.030.05
EUR537.152.69
GBP609.352.85
CAD356.930.62
JPY43.770.16
CNY69.580.01
CHF478.552.90


Experts
Yulia Ustyugova: Armenia can get access to IMF “insurance line”Yulia Ustyugova: Armenia can get access to IMF “insurance line”
Armand Arton: The question whether citizenship should be granted in  return for investments is rather rhetoricalArmand Arton: The question whether citizenship should be granted in  return for investments is rather rhetorical
Former head of the Ministry of Finance: <Confrontation> with Lydian may cost much to ArmeniaFormer head of the Ministry of Finance: with Lydian may cost much to Armenia
Vardan Aramyan: It will be unreasonable if the government goes to revise the allowable national debt ceiling in GDPVardan Aramyan: It will be unreasonable if the government goes to revise the allowable national debt ceiling in GDP
HSBC Bank Armenia increases efficiency and focuses on digital servicesHSBC Bank Armenia increases efficiency and focuses on digital services
Bulgarian Minister: The level of Armenian-Bulgarian economic  cooperation is still unsatisfactoryBulgarian Minister: The level of Armenian-Bulgarian economic  cooperation is still unsatisfactory
Expert: Recruitment market in Armenia from the point of view of  supply and demand is sleepingExpert: Recruitment market in Armenia from the point of view of  supply and demand is sleeping
Expert: Despite the adequacy of Armenian banks` capitals, the  opportunities for its optimal use are severely limitedExpert: Despite the adequacy of Armenian banks` capitals, the  opportunities for its optimal use are severely limited
Association of Organic Agriculture is being created in ArmeniaAssociation of Organic Agriculture is being created in Armenia
Pailak Tadevosyan: Governments change in Armenia, but taxation  approaches do not changePailak Tadevosyan: Governments change in Armenia, but taxation  approaches do not change
Rouben Indjikian: Everyone should follow the established unified and fair rules of the gameRouben Indjikian: Everyone should follow the established unified and fair rules of the game
Mher Arakelyan:  Armenia`s payment business has great prospectsMher Arakelyan:  Armenia`s payment business has great prospects
Rating-Agentur Expert RA GmbH and AmRating issued an industry report  on Armenia`s banking systemRating-Agentur Expert RA GmbH and AmRating issued an industry report on Armenia`s banking system
Igor Nazaruk: Each planted sprout has the right to a successful prospect if it is cherished and taken care ofIgor Nazaruk: Each planted sprout has the right to a successful prospect if it is cherished and taken care of
Ara Khzmalyan: Armenia is comfortable to Russian touristAra Khzmalyan: Armenia is comfortable to Russian tourist
The Armenian delegation to the US followed the advice of President TrumpThe Armenian delegation to the US followed the advice of President Trump
Outflow of population and passivity of the Diaspora pushes property prices downOutflow of population and passivity of the Diaspora pushes property prices down
Finombudsman: Amendments to the Civil Code on the imposition of fines and penalties will reduce the number of outstanding loans and  non-creditworthy consumersFinombudsman: Amendments to the Civil Code on the imposition of fines and penalties will reduce the number of outstanding loans and non-creditworthy consumers
Vahan Shakaryan: If we promote Armenia, the promotion of economic sectors will not be a run with obstacles, but a light run for short distancesVahan Shakaryan: If we promote Armenia, the promotion of economic sectors will not be a run with obstacles, but a light run for short distances
Gagik Aghajanyan: There is no need to look for alternatives - it is necessary to work and develop actual   directionsGagik Aghajanyan: There is no need to look for alternatives - it is necessary to work and develop actual   directions

Search by date

Government Bonds

Issue volume

10 billion

Volume of T-bills for placement

200 million

Volume of submitted competitive applications

200 million

Volume of satisfied bids

200 million

Yield at cut-off price

 5.8314%

Maximum yield

 5.8314%

Мinimum yield

 5.8314%

Weighted average yield

 5.8314%

Number of participants

2

The maturity date of T-bills

03.02.2020

ArmEx

 

СПРОС (Покупка)

USD

Средневзв. Цена

482,00

ПРЕДЛОЖЕНИЕ (Продажа)

  USD

Средневзв. Цена

-

СДЕЛКИ

USD

Цена откр.

482,00

Цена закр.

482,00

Мин. Цена

482,00

Макс. Цена

482,00

Ср/взв. Цена

482,00

-0.16

Кол-во сделок

1

Объем (инвал.)

200 000

0бъем (драм)

96 400 000

Commented
Forecast: Electricity exports to the Middle East through Iran are a  key component of Armenia`s geo- economic strategyForecast: Electricity exports to the Middle East through Iran are a  key component of Armenia`s geo- economic strategy
ArmInfo IC: In Armenia,  CMTPL loss ratio increased up to 64.5% in Q1  2019ArmInfo IC: In Armenia,  CMTPL loss ratio increased up to 64.5% in Q1  2019
Overdue loans accelerate growth in banking system of ArmeniaOverdue loans accelerate growth in banking system of Armenia
RA Prime Minister: European Union is not ready to finance 100% of  development programs implementation in ArmeniaRA Prime Minister: European Union is not ready to finance 100% of  development programs implementation in Armenia
T.Avinyan: The Government is open for cooperation and encourages  active dialogue and interaction in all areas T.Avinyan: The Government is open for cooperation and encourages  active dialogue and interaction in all areas 
Agreement on construction of a new unit with combined gas cycle  signed in YerevanAgreement on construction of a new unit with combined gas cycle  signed in Yerevan
Veolia Jur: Regulatory charges are false and unfoundedVeolia Jur: Regulatory charges are false and unfounded
Armenian Prime Minister: We are gaining momentum for economic takeoffArmenian Prime Minister: We are gaining momentum for economic takeoff
Through the mobile banking application of Ardshinbank you can get a  loan in seconds.Through the mobile banking application of Ardshinbank you can get a  loan in seconds.
By the end of 2018, By the end of 2018, "Galburdjian Group" will launch the production of  sesame oil in Armenia
Expert: Armenia has a problem with effective use of water resources,  rather than small hydropower stationsExpert: Armenia has a problem with effective use of water resources,  rather than small hydropower stations
Investment forum Investment forum "Energy Week 2018" to be held in Armenia
Expert: It is necessary to start implementing the program for the  construction of a new nuclear unitExpert: It is necessary to start implementing the program for the  construction of a new nuclear unit
The Armenian government suggests raising the minimum pension by 60%The Armenian government suggests raising the minimum pension by 60%
The updated feasibility study of construction project of electricity transmission line Armenia- Georgia will be ready by the end of the year - the Ministry of EnergyThe updated feasibility study of construction project of electricity transmission line Armenia- Georgia will be ready by the end of the year - the Ministry of Energy
Eurasian Development Bank wishes to expand its activities in ArmeniaEurasian Development Bank wishes to expand its activities in Armenia
$ 100 million to be invested in repatriation project Build Armenia$ 100 million to be invested in repatriation project Build Armenia
FRV: Armenia`s growing desire to increase renewable energy sources is  a decisive factorFRV: Armenia`s growing desire to increase renewable energy sources is a decisive factor
Suren Papikyan: It`s safe now to do business in Armenia, assures  Armenian MinisterSuren Papikyan: It`s safe now to do business in Armenia, assures  Armenian Minister
Armenian state debt started reducing up to $6.7 bln to June 1 2018Armenian state debt started reducing up to $6.7 bln to June 1 2018
Minister: Implementation of program on liberalization of the electric  power complex of Armenia will be completed within the next two yearsMinister: Implementation of program on liberalization of the electric  power complex of Armenia will be completed within the next two years
Nikol Pashinyan: In a number of cases after paying fines and  penalties the borrowers will be allowed to take new loan Nikol Pashinyan: In a number of cases after paying fines and  penalties the borrowers will be allowed to take new loan 
German bank KFW urges Armenia to build power line in the direction to  GeorgiaGerman bank KFW urges Armenia to build power line in the direction to  Georgia
Anna Chobanyan-one of most likely candidates for new Head of General  Department of Civil Aviation Anna Chobanyan-one of most likely candidates for new Head of General  Department of Civil Aviation 
IFAD confirms its readiness to develop and implement new joint programs with Armenia`s Agriculture MinistryIFAD confirms its readiness to develop and implement new joint programs with Armenia`s Agriculture Ministry
Rosselkhoznadzor asks not politicize the issue of deliveries of tomatoes from Armenia to RussiaRosselkhoznadzor asks not politicize the issue of deliveries of tomatoes from Armenia to Russia